U.S. Consumer Confidence Firms

The Conference Board Consumer Confidence Index increased 1.9% during January (12.4% y/y) to 125.4 following a 4.3% December decline to 123.1, revised from 122.1. A level of 123.2 had been expected in the Action Economics Forecast Survey. The indexes are based on 1985=100. During the past thirty years, there has been a 70% correlation between the level of consumer confidence and the y/y change in real PCE.

The rise in overall confidence reflected a 4.7% increase (6.2% y/y) in the expectations index to 105.5 after December's 9.2% decline. The present situation index reading eased 0.8% (+19.5% y/y) to 155.3 following a 1.0% gain.

The percentage of respondents indicating conditions are "good" fell to 34.9% this month from December's 35.8%. The percentage saying business conditions are "bad" edged up to 12.7% from 11.3%. Job market readings remained firm. Jobs were viewed as "plentiful" by an expansion high, 37.6% of respondents. Jobs were viewed as "hard to get" by 16.4%, up slightly from December's expansion low of 16.0%. The net jobs assessment improved to +21.2, the most favorable since July 2001. The differential is 97% inversely related to the unemployment rate.

The increase in the overall expectations reading reflected an increase in the percentage expecting business conditions to improve over the next six months to 22.0% from 21.6% in December. Those expecting more jobs was fairly steady at 19.0%, though that was down from the 23.8% expansion high reached during March of last year. Incomes are expected to improve by a lessened 20.4% of respondents, down from the 22.7% expansion high reached in December.

Expectations for the inflation rate in twelve months fell to 4.6% from 4.8% in December, while the percentage expecting higher interest rates over the next twelve months increased to 67.8%, a six-month high. Those looking to buy a home in the next six months plunged to 6.0%, following a significant strengthening through December.

By age group, confidence increased the most among individuals over age 55, up 18.7% y/y. Confidence among those aged 35-54 gained 13.5% y/y, while younger respondents, under age 35, saw confidence decline 1.5% y/y.

The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON, and the market expectations are in AS1REPNA.

Semiannual Monetary Policy Report to the Congress from Fed Chairman Jerome H. Powell is available here   https://www.federalreserve.gov/newsevents/testimony/powell20180226a.htm

The Federal Housing Finance Agency's (FHFA) index of U.S. house prices rose 6.5% y/y during December. The rate of increase has improved from 5.3% in 2014 and contrasts to the house price deflation from 2008 to 2011. In the month of December alone, house prices rose 0.3% m/m, the smallest increase in six months. Over the past three months, prices have risen at a reduced 5.6% annual rate.

The annual performance of home prices continued to vary significantly across the country. On the strong side were the Mountain and Pacific regions where prices rose roughly 9.0% from December-to-December.

These relatively strong y/y gains were followed by the South Atlantic, West South Central, New England and East North Central regions where prices increased roughly 6.0% y/y.

Slower annual house price appreciation occurred in the Middle Atlantic, East South Central and West North Central regions.

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index also includes refinancings on the same kinds of properties. The indexes are based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The FHFA data are available in Haver's USECON database.

Retail gasoline prices slipped to $2.55 per gallon last week (+10.1% y/y) from $2.56 per gallon during the prior week. Haver Analytics constructs factors adjusting for the seasonal variation in gasoline pump prices. The seasonally-adjusted price fell to $2.70 per gallon from $2.77.

WTI crude oil prices rebounded to $62.48 per barrel last week (15.7% y/y), and more-than-reversed the prior week's decline. Prices rose further yesterday to $63.91 per barrel. Brent crude oil prices increased to $65.52 per barrel last week and rose to $67.96 yesterday.

Natural gas prices improved to $2.60/mmbtu last week (2.7% y/y) and were $2.59/mmbtu yesterday.

In the week ended February 9, gasoline demand increased 5.4% y/y, while total petroleum product demand improved 4.3% y/y. Gasoline inventories declined 2.8% y/y, while inventories of all petroleum products fell 8.8% y/y. Crude oil input to refineries improved 3.6    % y/y in the last four weeks.

The energy price data are reported by the U.S. Department of Energy. The petroleum demand and inventory figures are from the Oil & Gas Journal Weekly. These data can be found in Haver's WEEKLY database. The daily figures are in DAILY and greater detail on prices, demand and production, along with regional breakdowns, are in OILWKLY.